Boston, MA -- (ReleaseWire) -- 03/14/2014 -- We expect Italy's telecoms service providers to pursue revenue and subscriptions growth from the provision of non-voice services such as data and multiplay services to offset the decline in voice revenue and subscriptions growth owing to a combination of factors, including market saturation, intense competition and mobile termination rate cuts. This view is supported by continued investments in next generation access network infrastructure and deployment of telecoms crossover services such, as mcommerce, during 2013, a trend we expect to continue in 2014 and throughout our five-year forecast period to 2017.
- Mobile average revenue per user declined sharply in 9M13 as a result of falling voice usage, the introduction of cheaper tariffs (with free calling and messaging offered as an incentive) and cuts to termination rates all conspiring to erode revenue.
- Uptake of 3G subscriptions remained robust even in a difficult economic climate as consumer demand for smartphones drove growth. AGCOM reported 20% year-on-year (y-o-y) growth in 3G subscriptions during Q213.
- The dedicated mobile broadband market continues to expand rapidly, with connections increasing by 24.6% y-o-y in Q213. Accordingly, we forecast continued growth in total broadband subscriptions for the duration of our forecast to 2017, but growth will be limited by saturation in the fixed-line broadband segment.
- The MVNO market maintained an uptrend in 2013, with an 18.8% y-o-y increase in subscriptions in Q213 and the proportion of MVNO subscriptions to total mobile subscriptions rising to 5.5% at the end of same period.
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Key Trends And Developments
Telecom Italia's weak financial performance in recent quarters is leading the operator to implement new strategies to improve cost efficiency. In November 2013, the company announced plans to sell about 7,000 mobile towers in the country. The tower sale is expected to raise around EUR700mn (US$950mn), which will help pay down its US$38bn debt. Telecom Italia's debt was downgraded to junk status by the ratings agencies over concerns about the operator's ability to meet its obligations amid rising operating expenses and falling revenues. The operator intends selling the towers in a trade sale or will form a local joint venture. It was reported in October that Telecom Italia was considering an option to take US$2.8bn from its shareholders in order to pay off a proportion of its debt.
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